The Finance Minster also asserted that demonetisation and the introduction of GST is enabling the government to make policies which will benefit the micro and small medium enterprises.

"Mass formalisation of the business of MSMEs is happening after demonetisation and introduction of GST. This is generating enormous amount of financial information database of MSMEs which will be used for improving the finances of MSMEs and other requirements including working capital," said Jaitley in the Lok Sabha while presenting the government's budget outlay for 2018-19.

The FM also promised to revamp the online loan sanctioning facilities for MSMEs to enable prompt decision making by banks.

According to the Economic Survey 2017-18, data on credit disbursed by banks shows that out of a total outstanding credit of Rs 26,041 billion as in November 2017, 82.6% of the amount was lent to large enterprises and MSMEs got only 17.4 % of total credit.

Extension of credit has been low for the SME sector in the country despite lower level of NPA. The Economic Survey revealed sector-wise NPAs of banks
from till March 2017 indicating that MSMEs had 11.8% (Rs 658 billion) share in total NPAs by PSBs in the priority sector, and 13.1% (Rs 757 billion) in 2016. It also revealed that MSMEs had 9.6% share of NPAs in the priority sector for PVBs in 2016 and 8.7% in 2017.

With this backdrop, FM promised that the "government will soon announce measures to effectively address NPAs and stressed accounts for MSMEs."
"This will enable a larger financing of MSMEs and considerably ease cash flow challenges faced by MSMEs," FM added.

Commenting on the impact of MUDRA scheme launched in April 2015, FM said that the scheme has led to sanction of Rs 4.6 lakh crore in credit; out of which 76% accounts belong to women and more than 50% to SC, ST and OBCs.

"We propose to set Rs 3 lakh crore for lending under Mudra scheme for 2018-19," said Jaitley.

The FM also promised to review refinancing policy and eligibility criteria set up by under Mudra to enable better financing for MSMEs.

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